3rd QUARTER ACTIVITIES REPORT 2021/2022

FAST FACTS

ASX Code: HNR

3rd Quarter (January - March 2022):

LITHIUM-ION BATTERY (LIB) RECYCLING

Shares on issue: 2.6 billion Market cap: $86.0M (at 3.3c) Cash: $4.5M (31 March 2022) Debt: Nil

CAPITAL STRUCTURE

BOARD OF DIRECTORS

Non-Executive Chairman Jonathan Murray Executive Director Damian Hicks Non-Executive Directors Markus Bachmann Clay Gordon Amanda Scott

"Hannans future is aligned with the recycling of lithium-ion batteries. This allows recovered metals to be used in the production of new lithium batteries, minimises waste and reduces the CO2 footprint of electric vehicles." Damian Hicks, Executive Director of Hannans

  • Announced major transaction enabling expansion of Hannans LiB recycling activities into major European electric vehicle (EV) markets, with due diligence and documentation ongoing.

  • Completed technical tour of Primobius GmbH LiB recycling demonstration plant in Hilchenbach, Germany; plant based on same technology being commercialised by Hannans. [Note Mercedes-Benz AG recently announced it will establish a battery recycling plant with Primobius.1]

  • Supported successful lodgement by third party of pre-qualification documentation for LiB recycling tender - outcome of process anticipated late 2022.

    LITHIUM-ION BATTERY RECYCLING

    Sweden, Norway, Denmark & Finland - JV UK & Ireland (pending - acquisition)

    Italy & Balkans (pending - right to fund)

    MINERAL EXPLORATION

    Western Australia Fraser Range (Ni-Cu) Forrestania (Ni)

    Moogie (Cu-Au & Ni-Cu)

    Forrestania (Au) 20% - Free-Carried to DTM

  • Face-to-face meetings held with technology providers and investors in Norway, Sweden, Finland, and Germany.

MINERALS EXPLORATION

"The most important thing is that we vertically integrate." Ford intends to take control of its supply chains "all the way back to the mines."2 Jim Farley, CEO of Ford Motors

"We'll leverage our 20 year mineral exploration experience in Western Australia to discover metals for society." Damian Hicks, Executive Director of Hannans

  • Moogie (Copper-Gold, Nickel-Copper & Gold) - completed airborne and ground EM surveys.

    ABOUT HANNANS LTD (EST. 2002)

    Our vision is to sustainably produce metals for society.

  • Forrestania (Nickel) - completed preparations for ground geophysics and soil geochemistry within Western Ultramafic Belt.

  • Fraser Range (Nickel-Copper) - completed preparations for geochemical, geophysical, and geological reconnaissance programmes.

  • New business (Nickel, Copper, Lithium) - continued project generation activities for high-grade nickel, lithium and copper opportunities in Western Australia.

  • 1https://group.mercedes-benz.com/company/news/recycling-factory-kuppenheim.html

  • 2https://www.reuters.com/article/metals-batteries-ahome-idINL5N2WO6O7?s=09

www.hannans.com

@Hannans_Ltd

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Level 12, 197 St Georges Terrace, Perth, Australia

ASX: HNR ABN: 52 099 862 129

COMPLIANCE AND CORPORATE GOVERNANCE

  • Sought ASX, regulatory and shareholder approvals, and commenced due diligence for major transaction enabling expansion of Hannans LiB recycling activities into major European electric vehicle (EV) markets.

  • Commenced preparing documentation for a general meeting of shareholders to be held 4th Quarter 2021/2022 to vote on the major transaction, the change in nature of Hannans primary activity to LiB recycling and other required resolutions.

ENVIRONMENTAL AND SOCIAL GOVERNANCE

  • Commenced process to integrate the Recommendations of the Task Force on Climate-related Financial Disclosures into policies, procedures, and practises.

CORPORATE

  • Approval of the expansion transaction necessitates a consolidation of Hannans fully paid ordinary share capital on a 1.2:1 basis. This consolidation will be completed prior to, and contemporaneously with the capital raise referred to below.

  • To provide funds for activities in the new regions and to cover transaction costs Hannans plans to raise $2.5M (with oversubscriptions for an additional $1M).

  • On a post consolidation basis, the capital raising is priced at 3.5 cents per share (cps). This is equal to 2.9 cps on a pre-consolidation basis. Hannans is currently trading at 3.3 cps on a pre-consolidation basis.

  • Approval of the expansion transaction by ASX also requires Hannans to obtain 300 applications for new shares under the capital raising for parcels to the value of not less than $2,000. If this is not achieved the expansion transaction will not proceed, participation by all shareholders is therefore strongly encouraged.

Goals for the 4th Quarter (April - June 2022):

LITHIUM-ION BATTERY (LIB) RECYCLING

  • Settle LiB recycling expansion transaction.

  • Source LiBs to underpin establishment of 1st shredding and sorting facility.

MINERALS EXPLORATION

  • Moogie (Copper-Gold & Nickel-Copper) - obtain permits to drill test highest priority targets and complete next phase of soil surveying (infill and reconnaissance).

  • Forrestania (Nickel) - complete ground geophysics, soil surveying using the UltraFine+™ technique, complete rehabilitation survey and plan next steps.

  • Fraser Range (Nickel-Copper) - acquire third party airborne geophysical data and review.

COMPLIANCE AND CORPORATE GOVERNANCE

  • Obtain all approvals to complete major transaction.

  • Re-comply with Chapters 1 and 2 of the ASX Listing Rules.

ENVIRONMENTAL AND SOCIAL GOVERNANCE

  • Prepare internal report on status of TCFD compliance, and recommendations.

CORPORATE

  • Complete consolidation and capital raising.

LITHIUM-ION BATTERY RECYCLING

During the Quarter Hannans executed a heads of agreement with private company Greenhouse Investments Ltd (Greenhouse Agreement) effectively granting Hannans the right to enter the lithium battery (LiB) recycling markets in the United Kingdom, Ireland, Italy, and the Balkans (Greenhouse Transaction).

Subject to completion of the Greenhouse Agreement, Hannans will hold rights to a sustainable and environmentally friendly LiB recycling technology in territories incorporating 49% of the population of the EU27 (plus the United Kingdom) and 38% of all motor vehicles registered in the EU (plus the United Kingdom and Norway). This gives Hannans tremendous leverage to the rapidly growing European LiB recycling sector, and specifically countries with the highest penetration rate of electric vehicles.3

Neometals Ltd (ASX:NMT) is licensor of the base technology being commercialised by Hannans and Greenhouse (and globally by Primobius GmbH). Neometals is the largest shareholder4 of Hannans and owns 50% of Primobius. In a very positive endorsement of the technology Mercedes-Benz AG recently announced it will establish a LiB recycling plant with Primobius in Germany5.

Hannans is focussed on sourcing lithium-ion battery feedstock to underpin establishment of its first shredding and sorting facility in the Nordic region (and subject to settlement of the Greenhouse transaction elsewhere in the UK, Ireland, Italy, and the Balkans). To that end, Hannans, working together with Greenhouse is in discussions with several potential partners that have the potential to source, and or supply LiB feedstock in the volumes required to establish an economic business case. The announcement of the Primobius / Mercedes-Benz transaction in March 2022 significantly increased the profile of the LiB recycling technology in Europe which had positive immediate flow-on effects for Hannans in the Nordic region. At this point in time, other than the memorandum of understanding signed by Greenhouse with Metalfer in the Balkans6 no binding LiB sourcing agreements have been concluded however, several preliminary discussions are ongoing.

3 The Greenhouse Agreement remains subject to receipt of ASX, regulatory and shareholder approvals, as well as completion of satisfactory due diligence and documentation by Hannans. For further information please refer to Hannans ASX announcements dated 1 February 2022, 14 February 2022, and 1 April 2022 availablehere.

  • 4 Holding 32.43% on a pre-capital raise and pre-Greenhouse Agreement basis.

  • 5https://group.mercedes-benz.com/company/news/recycling-factory-kuppenheim.html

  • 6 Refer Hannans ASX released dated 1 February 2022.

MINERALS EXPLORATION

Hannans commenced exploration activities in Western Australia in 2002 and Western Australia is the world's #1 exploration and mining jurisdiction. The global community is demanding significantly more high quality mines from jurisdictions with high environmental and social governance standards. Hannans will leverage its Western Australian exploration expertise to facilitate new discoveries capable of sustainably supplying the metals demanded by society.

Figure 1: Project Locations.

Moogie (Nickel-Copper-PGEs, Copper-Gold, and Gold)

The Moogie Project is located approximately 260km north-west of Meekatharra and 300km east of Carnarvon in the East Gascoyne Region of Western Australia. It is located within the Gascoyne Province proximal to the margin with the Yilgarn and Pilbara Cratons. Such collision belts at the margin of cratons are known to host deep crustal-scale structures, favourable target sites for mineralisation. The Project hosts a significant strike length of the Cardilya Shear Zone, identified as such a deep-seated structure. The Project comprises seven exploration tenements, 5 granted and 2 under application, with total area of approximately 791 km².

The Cardilya Shear Zone is a 2-5km wide, east-west trending shear zone which buckles and thickens at its intersection with northeast-trending Deadman Fault Zone, a second major structure transecting the Project. Hannans is currently exploring the Cardilya Shear Zone and related structures for copper-gold (Cu-Au), nickel-copper-platinum group elements (Ni-Cu-PGE) and shear-hosted gold (Au) mineralisation.

Figure 2: Moogie Project Tenure and Regional Geology.

During the 3rd Quarter 2021 / 2022 helicopter-borne electromagnetic (EM) and magnetics surveys were completed at the priority Mission Bore, Breccia, Minni Ritchi and Ghallangee prospects, identified in earlier broad geophysical and geochemical data collected by Hannans.7 This airborne survey identified an elevated EM response in the vicinity of Minni Ritchi (targets A & B) plus new a target (target C).

Follow-up ground-based EM was completed over targets A, B & C involving moving-loop and fixed-loop surveys.8 The aim of the ground surveys was to verify the original helicopter-borne anomalies and provide an accurate location of the conductive target for drill testing. The ground EM confirmed two of the priority helicopter EM targets (targets A & C) and defined discrete conductors (see Figures 3 & 4). Both targets are associated with or adjacent to weakly magnetic units and have been recommended for drill testing as soon as practical.

Figure 3: Target A 3-D Modelling.

Figure 4 Target C 3-D Modelling.

  • 7 Refer Hannans ASX release dated 17 February 2022.

  • 8 Refer Hannans ASX release dated 5 April 2022.

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Hannans Limited published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 04:21:01 UTC.